Monday, July 22, 2013

Judge Posner's Patent Trolls - Chicken Little the Sky is Falling?

In Patent Trolls--Posner, Judge Posner tells us the big problem with the US patent system is patent trolls.

Judge Posner informs "a patent troll buys patents (sometimes thousands) with the aim not of making the patented product or process or licensing it to others to make but of finding companies or individual inventors that the troll can claim with more or less plausibility are infringing one or more of his inventory of patents. The troll demands a license fee from every such allegedly infringing company or inventor. If the target of the demand refuses, the troll may drop the matter or may sue the refuser for patent infringement, hoping that if the threat is plausible this will induce a favorable settlement. If the target refuses to settle, the troll, to maintain the credibility of its threats, may litigate the suit to judgment. The troll does not practice the patent; but, in its own terminology, 'asserts' it."

He concludes it is extremely difficult to discern any possible social benefits from trolls and extremely easy to discern substantial social costs. But what I find extremely difficult to discern is whether many patent owners can avoid the label "patent troll." It appears many could be labeled a patent troll if (1) they don't practice the invention and (2) go to court to enforce their patent rights.

To get rid of these patent trolls, Judge Posner tells us we need a rule that would bar enforcement of any patent that is not reduced to practice within a specified time after the patent is granted but there is no legal authority (e.g., Constitution, Congress, and court decisions) to support his idea, which would favor established corporations rather than startups.

Judge Posner's current crusade against patent assertion entities is burying years of his legal scholarship, but perhaps he deserves credit: he didn't delete reader comments that skewer his post.

Copyright © 2013 Robert Moll. All rights reserved.